On a visit to Paris on Monday, the Mittal Steel Co chairman and CEO pledged to create a European champion, protect European jobs and respect European labour conditions.

Arcelor warned against its predator's "irregular" profitability, pledging to consider "all options" to foil the hostile bid.

Lakshmi Mittal said: "Mittal is committed to the social policies and commitments that Arcelor has implemented. Regarding employment, this merger is not about job reductions."

On Tuesday, the 55-year-old steel boss is scheduled to meet Jean-Claude Juncker, the prime minister of Luxembourg, whose government is the largest shareholder in Arcelor with a 5.6% stake.

Juncker is also set to discuss the takeover bid at a meeting with Jacques Chirac, the French president on Wednesday, when Mittal will meet Belgian authorities and the EU's competition commissioner to discuss his plans for Arcelor.

Third richest man

The London-based steel boss - ranked the third richest man on the planet by Forbes magazine - was speaking at a Paris news conference after meeting Thierry Breton, the French finance minister.

Breton said he had still to be convinced that a tie-up between the world's top two steel companies would be risk-free for France, where Arcelor employs 30,000 workers.

Arcelor is Europe's biggest
supplier of high-grade steel

Mittal Steel had "no industrial plan on the table" to explain how the takeover would work, the minister said.

"Without any information at this stage, we can only reiterate our deep concern."

Mittal sidestepped questions about whether the deal could go ahead against government opposition. "I do not see the reason why the government will not accept this."

The takeover bid, announced on Friday, would create a new company with almost 350,000 employees at 61 plants in 27 countries, but with few areas of overlap that could cause anti-trust problems.

Mittal Steel is the biggest US supplier of high-grade, high-margin auto steel; Arcelor occupies the same position in Europe.

Mittal said: "It's the best fit between any two companies in the industry."

Counter-attack

Guy Dolle, Arcelor's CEO, launched a counter-attack against Mittal Steel on Monday.

Highlighting Arcelor's superior mix of high-grade production and his Rotterdam-based rival's relative dependence on spot-traded commodity steel, he talked up the unpaid integration costs of Mittal's recent expansion drive, without giving figures.

The Arcelor boss did not try to hide the personal pique behind his business argument, angrily rejecting Mittal's suggestions that he had sought to discuss a friendly offer when the two met on 13 January at Mittal's London home.

"We are not prepared to change our offer. We believe it is a very attractive proposal"

Lakshmi Mittal,
CEO of Mittal Steel

Dolle said:
"When 300,000 employees and a market capitalisation of 40 billion are concerned, I think it deserves more than a four-minute conversation after the aperitif. That's the definition of a friendly offer, according to Mr Mittal."

Arcelor is "well prepared" to defend itself, and the board - which formally rejected the bid on Sunday - has instructed management to consider "all options in the interests of the company's partners and shareholders", Dolle said.

He declined to say what the options were.

Attractive proposal

While industry analysts believe the two steelmakers would be an excellent fit, many suggest Mittal Steel may have to raise its offer of four Mittal shares and $42.63 in cash for every five Arcelor shares.

The bid valued Arcelor shares at $34.12, a 27% premium over their closing price on the eve of the announcement.

But Lakshmi Mittal dismissed talk of an improvement on the bid. "We are not prepared to change our offer. We believe it is a very attractive proposal," he said.